Back to School – Highlights of CableFAX’s First Cable Business Boot Camp
By| March 13, 2014
CableFAX hosted its inaugural Cable Business Boot Camp at the Yale Club in New York City Thursday morning. And we learned a lot! Here are a few highlights from the industry heavyweights in attendance.
Insights from Pivot president Evan Shapiro on “the cable club,” its nuances and how the industry’s pieces all fit together:
*On Measurement: Television continues to be measured today by 20 million Nielsen families, and those skew more white and are older than the average American household, he said. Nonetheless, “ad agencies require that one sense of currency.” Unfortunately, set-top box data doesn’t account for demos and age, due to privacy issues.
*The Cable/Broadcast Share: He reminded Boot Campers that today’s TV industry is vastly different from the one a couple of decades ago, when “All in the Family” was watched by 67 million people at the same time, on the couch as a family. Cable’s current share of the primetime viewership hours is around 60%, while broadcast has about 40%. These percentages were effectively flipped during the 1970s.
*The Niche Rules: The definition of a hit today has completely changed from what it was back then. For instance, IFC’s “Portlandia” attracts an audience of 400,000 people. Yet that’s considered a hit for the network. Why? Because today’s state of content creation is about finding a niche for your stories. “Niche is the new mass… You don’t have to be all things to all people anymore,” he said.
*Redefining the Industry: Shapiro pointed to an important stat about the cable industry’s finance: in 2013, $160 million came from subscription fees. With that figure in mind, the industry needs to “redefine itself” and cater to “pluralists,” or those who watch video on multiple platforms, or they will lose out on their sub fees.
*On Live TV: Though Internet advertising is on the rise, advertisers still prefer to buy TV spots because they’re “more impactful,” he said. People continue to watch live TV. In fact, time spent on time-shifted viewing doesn’t come anywhere near to the amount of time spent watching live TV. He noted that 70% of Gen Y watched live television. About 78% watch video online, but they’re not mutually exclusive, he added. A lot of that is driven by sports, but a good portion is also driven by consumers just wanting the TV on in the background in their homes.
Insights from Craig Moffett, principal of MoffettNathanson Research LLC, on shifting dynamics of the cable industry:
*Cable as Transport Function: Moffett argued that cable companies are not content creators, but rather infrastructure companies. “And cable has the winning infrastructure,” he said. “That advantage only grows as the availability and demand for higher broadband speeds increases.” And while the debate on how fast consumers want things has always been around, ultimately “we have not found a limit… they always want things faster.” The next 10 years will be spent determining how that cable advantage gets regulated. He added that the pending Time Warner Cable – Comcast merger “significantly accelerates the regulatory discussion.”
*A Usage-Based Pricing Model: A second tenet stressed by Moffett relates to the first: wireless will not emerge as an “economically viable substitution for broadband.” Moreover, cable companies’ habit of steadily raising broadband rates–Time Warner Cable, for instance, raised prices by 11% last year—is essentially “flirting with regulation.” But while Moffett said a usage-based pricing model would be more fair for customers and broadband providers, it would need to happen before OTT competition hits critical mass. Even before that point, cable will face accusations that it’s trying to squash competition now that alternatives like Netflix and YouTube exist. He said the TWC-Comcast merger is actually good for OTT companies because "if I was Netflix, usage based pricing would have to be my battle.” And he predicted that TWC-Comcast’s desire for regulatory approval will likely spur them to agree to conditions that prevent usage-based pricing.
Insights on Driving Tune-In and Engagement in a Multiplatform World, from Linda Ong, president and Brand Strategist for TruthCo, and Shareablee’s Tania Yuki:
*Platform Rankings: When it comes to platforms on which social media users engage with TV shows, Facebook saw 84% of the social engagement. However, Instagram is rising very fast. In effect, “the opportunity for social is very, very early,” and she expects to see far more engagement moving forward.At present, 73% of social media users are engaged with at least one TV show.
*Crafting Content: Photos are most successful for driving engagement, said Yuki, while including a question has a positive effect as well. TV watchers respond very well to active calls to action, like tune-in messaging, she said.
*Opportunities Gained—and Missed: Engagement before and after live premieres are great opportunities for engaging your audiences, though not all shows are taking advantage and keeping the headwind going between episode air dates, Yuki said. “Make sure you don’t leave viewers hanging between actual live broadcasts,” she said.
*Future of TV. It will not be dictated by devices, but rather consumers, according to Ong. The world of television today includes numerous paradigm shifts, including the move from TV as a “manufactured, mass-market product” to the new world of “artisanal TV.” Whereas you used to cast your net wide when creating content, the “proliferation of platforms has allowed people to get great content everywhere.” It’s not cool to be popular anymore—particularly from the eyes of Millennials, for whom “popularity is a sign of bad quality.” Success will be measured by their followings, which may build slowly. Network executives will be resistant to this, but they’ll be required to have more patience.
*Protagonist Shift: The old world of TV content featured “cookie cutter archetypes.” But today, we have “difficult characters challenging the familiar,” starting with Tony Soprano up to Breaking Bad’s Walter White.
Insights from Ryan O’Hara, president of content distribution and sales for MSG Media:
*Advice for Cable Up-and-Comers: When you’re younger, it’s better to be with a bigger company, O’Hara said: “a well-established company with a bigger brand,” that has a lot of assets for you to work with. That way you are able to get to know more people. Another piece of advice: “slow down a bit.” Focus on the thing you’re doing and doing it well.